PROFESSIONAL SUPERVISION OVER THE RECONSTRUCTION AND MODERNIZATION OF THE RAILWAY SECTIONS BEOGRAD–STARA PAZOVA AND STARA PAZOVA–NOVI SAD (2019/2020)
During 2019 and 2020, the Ministry of Construction, Transport and Infrastructure conducted a public procurement procedure for the services of the supervisory body over the reconstruction and modernization of the Belgrade–Stara Pazova and Stara Pazova–Novi Sad railways. This public procurement was estimated to a total value of 944,333,333.00 dinars without VAT (close to 8 million euros). Works on the reconstruction of the railway section Stara Pazova–Novi Sad began on March 16, 2018, and they were performed by the Russian company RZD International, while the works on the reconstruction of the section Belgrade–Stara Pazova started on June 5, 2018 and were performed by the Chinese consortium China Railway International and China Communications Construction Company. The works were mostly financed from Russian and Chinese loans, and the contractors were selected on the basis of a bilateral agreement between Serbia and China, i.e., without a public procurement procedure. Due to the aforementioned reconstruction, the Belgrade–Novi Sad railway was closed in February 2019, and since then, passengers between these two cities cannot travel by train.
Having in mind that the public procurement procedure in question was conducted one year after the start of works on these railway sections, in a situation when expert supervision already existed and there was no need to allocate additional funds for its financing, the most important issue in this case was primarily accountability and purposefulness of procurement of these services. Namely, at the time of conducting the public procurement in question, professional supervision over the execution of works was performed by the employees of the “Serbian Railways Infrastructure”, the company that was the investor of the works. Therefore, it is unclear why, in addition to the existing supervisory body, whose services required no additional budget funds, the contracting authority conducted the public procurement in question with an estimated value of as much as 8 million euros. It is also unclear why the appointed professionals, within their regular competencies and for the salaries they already receive, could not perform the supervisory services until the end of the works.
Regarding the purposefulness of the public procurement in question, it was expected that the State Audit Institution (SAI) would react which never happened, at least as far as we know. In general, the accountability and purposefulness of public procurement are currently rarely subject to control. Even if the SAI finds certain irregularities in the control procedure, it remains only at the level of a statement and usually without any epilogue. Having in mind the subject procurement, the issue of the purposefulness of public procurement should certainly be paid much more attention in the audit of public funds.
In addition to (un)purposefulness, the subject public procurement was chosen for the great importance of professional supervision for quality execution of works with respect to deadlines and obligations arising from the technical specification. Namely, when it comes to the implementation of professional works supervision, numerous problems have been noticed. There are many examples – from the renovation of Slavija Square and Republic Square in Belgrade, through the reconstruction of Spens sports center in Novi Sad, to the reconstruction of the bridge in Nis. To this list we could add the works on the reconstruction and modernization of the Belgrade – Budapest railway (where the two aforementioned sections are located). According to BIRN (Balkan Investigating Reporting Network), Serbia had to pay its Russian partner $ 30 million just because of a mistake made by the CIP, The Institute of Transportation when designing the viaduct and tunnel in Cortanovci. Also, due to the delay in the works and the non-withdrawal of the Russian loan tranches, the state paid penalties that surpassed 4.7 million dollars. It is indisputable that all the mentioned problems and omissions are partially a consequence of poor professional supervision, for which, as we have seen, huge financial resources were allocated for only two sections. In order to reduce such situations to a minimum in the future, and to narrow the space for errors in the execution of works, we believe that it would be good to adopt certain instructions and models of acts that contracting authorities would use when purchasing professional supervision. This would undoubtedly reduce the costs that are ultimately borne by the citizens, but it would also increase the quality of works performed.